Desktop: Form 8615 - Kiddie Tax

Note: The rules relating to the Kiddie Tax computation for the tax year 2019 and 2018 were changed by the Further Consolidated Appropriations Act, 2020. A taxpayer is at will to use either the new rules or the old ones for these years.

In case the income of a child from interest and dividends together with any other investment income is more than $2,200 (or $2,100 for the tax years 2018 and before), a portion of the income of the child will be taxed at the same tax rate as the parent. Form 8615, Tax for Certain Children Who Have Unearned Income is used to calculate this tax, and is filed in case all of the following are true:

1. The child had unearned income in excess of $2,000 (or $2,100 for 2018 and before)
2. The child needs to file a tax return
3. The child is either:

Under 18 years of age at the end of the tax year
Turn 18 by the end of the year and did not have earned income that exceeded half their support, or
A full-time student of between 19-24 by the end of the tax year and did not have earned income exceeding more than half their support.

4. At least one of the parents to the child was alive at the end of the tax year
5. The child is not to jointly file a return for the tax year being filed

These conditions apply regardless of whether the child is a dependent but are not applicable in the event that both parents die at the end of the year.

To include Form 8615 with the child’s tax return:

Go to the Main Menu of the tax return (Form 1040)
From the menu select Tax Computation
Then Tax for Children Under Age 18 (8615)
Enter the Parent’s Information (the parent listed first on an MFJ return is to be used. In case it is an MFS or unmarried, the parent with the higher income in their return is to be used).
Fill the Form 8615 Edit Menu - A copy of the tax return of the parent will be required to fill this form, either the MFJ return, the MFS return of the parent earning the higher income, or the return from the parent with whom the child lived for majority of the tax year.

Alternatively, an election can be made by the parent(s) to report the interest, ordinary dividends and capital gain distributions of the child on their return rather than on Form 8615. If this is the case, Form 8814, Parents’ Election To Report Child’s Interest and Dividends is to be included, instead of Form 8615 with the tax return of the parents.

Note: This is not tax advice. It is a guide on how to enter Form 8615 into the Taxx Savage Pro program.

Additional Information:

IRS: Instructions for Form 8615, Tax for Certain Children Who Have Unearned Income